The telecoms giant AT&T has agreed to pay $85bn to buy the media powerhouse Time Warner and create one of the world’s largest media, TV and telecoms firms.

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The boards of the two companies unanimously approved the deal on Saturday. AT&T will pay $107.50 per Time Warner share, in a combination of cash and stock, worth $85.4 billion overall.

The deal, which combines America’s second-largest wireless telecoms company with the owner of HBO, CNN, Cartoon Network and the Warner Brothers movies, is likely to face tough regulatory scrutiny due to fears it could lead to less consumer choice and higher prices. If approved, the deal would be the biggest in the world this year.

AT&T’s CEO, Randall Stephenson, says he does not anticipate government blocking the acquisition, which the company says is expected to go through by the end of 2017. Time Warner’s CEO, Jeff Bewkes, says he expects all of his company’s creative and business executives to stay on “for a number of years”.

The Republican presidential nominee said on Saturday he would block the deal if he were elected. In a speech in Gettysburg, Pennsylvania, Donald Trump said AT&T’s purchase of Time Warner would give the combined group “too much concentration of power” and would “destroy democracy”.

Speaking about his continuing battle with the “dishonest mainstream media”, Trump said: “They’re trying desperately to suppress my vote and the voice of the American people.

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”

Telecoms companies are increasingly seeking to buy into cable TV providers and content producers, in order to offer more extensive packages to consumers. AT&T spent $48bn buying the satellite TV provider DirecTV last year, making it the country’s largest pay-TV provider, with 25 million customers. The company has also spent hundreds of millions improving its infrastructure to give consumers a better experience watching video content on their mobile phones.

Buying Time Warner would give AT&T, which has a market value of $226bn, access to the Harry Potter and Batman film franchises as well as hit TV shows such as The Big Bang Theory and Game of Thrones.

The AT&T-Time Warner deal vindicates Bewkes’s, decision to turn down a $85-a-share takeover approach from 21st Century Fox two years ago. Shares in Time Warner jumped 8% to $89.48 on Friday, when speculation about the proposed deal was first reported.

Brian Wieser, lead researcher at the analytics firm Pivotal, said the deal would present the new entity with potentially insurmountable difficulties.

Wieser said that while the marriage of a producer and a distributor might at first look similar to the successful Comcast, following its purchase of NBC Universal, an AT&T-Time Warner entity would present unique challenges. Other entities, he said, made more sense for the always-a-bridesmaid Time Warner.

“DirecTV and Time Warner in a lot of ways is more similar than Time Warner and AT&T,” he said. “It looks like a hedge against the commoditization of infrastructure.”

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Cash-rich telecoms companies such as AT&T are facing a crisis as their wireless businesses reach maturity and fixed-line income continues to erode.

“AT&T is an acquisition machine and interested in empire preservation if nothing else,” said Wieser.

“Time Warner has always been for sale at the right price. It’s not a position that creates any synergies and it does create some dis-synergies, like the problem of managing a global media company from Texas. It’s a standalone entity that gets lost when it’s part of a much bigger conglomerate.”

AT&T faces tough choices, said Wieser: “If the prospects for wireline growth are negative and the prospects for wireless growth tepid, what do you do to make sure your business grows?”

Time Warner, too, faces problems. The trend of “cord-cutting” – people getting TV over the internet – has eaten into the cable subscriptions that are vital to its networks.

There is also increasing competition from players such Netflix, Amazon Prime and Google’s YouTube. In August, Time Warner bought a 10% stake in the streaming service Hulu.